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Dollar mostly lower vs. rivals as focus turns to Fed meeting

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Shutterstock photo - - The dollar was mostly lower against a basket of other major currencies on Tuesday, as investors awaited upcoming U.S. data due later in the day, as well as the conclusion of the Federal Reserve's policy meeting on Wednesday.

Market participants were eyeing Wednesday's Fed statement to see if it would drop its reference to being patient before raising rates and signal that it is ready to hike rates depending on economic data.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was down 0.36% to 99.78, still close to Friday's highs of 100.78, the strongest since September 2003.

EUR/USD climbed 0.45% to 1.0616 after the ZEW Centre for Economic Research said that its index of German economic sentiment rose by 1.8 points to 54.8 this month from February's reading of 53.0. Analysts had expected the index to improve by 5.2 points to 58.2 in March.

The index of euro zone economic sentiment increased to a 13-month high of 62.4 in March from 52.7 in February, above forecasts for a gain to 58.2.

A separate report showed that euro zone consumer price inflation fell 0.3% last month, in line with expectations and unchanged from a preliminary estimate. Euro zone inflation declined by 0.6% in January.

The rate remains firmly below the European Central Bank's target of near but just below 2%.

Core CPI, which excludes food, energy, alcohol, and tobacco costs rose 0.7% in February, up from an initial estimate of 0.6%.

The dollar was steady against the yen, with USD/JPY at 121.27 after the Bank of Japan maintained its stimulus program but cut its inflation outlook, citing temporary declines in oil prices .

Japan's annual core consumer inflation slowed to 0.2% in January, well below the BOJ's 2% target.

Meanwhile, the dollar rose against the pound, with GBP/USD down 0.38% to 1.4772 and declined against the Swiss franc, with USD/CHF sliding 0.49% to 1.0025.

The Australian dollar was higher, with AUD/USD adding 0.17% to 0.7654 after the minutes of the Reserve Bank of Australia's latest meeting showed that the bank seees an advantage in waiting for more economic data before lowering interest rates.

Meanwhile, NZD/USD held steady at 0.7370 and USD/CAD was little changed at 1.2770.

Later in the day, the U.S. was to report on building permits and housing starts. offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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